“There isn’t any discussion on a plan to leave the euro […] the government is determined, in any event, to prevent market conditions which push towards the exit to be materialized,” he remarked.

This, of course, doesn’t rule out anything for the future, it just means that Italy will go into any talks with Brussels non-confrontational on this vector.

But, to reiterate the reality of the situation, as Zerohedge pointed out last week, via a research report from J.P. Morgan Chase, Italy’s best bet is to do exactly that, leave the euro.

And while ECB President Mario Draghi can talk a good game all he wants, demanding a balancing of the books before anyone can leave the euro, Italy’s rapidly worsening TARGET2 balances are a product of his supporting Italian bond yields for his own purposes.

So, his making that a requirement is akin to the loan shark making payments for the debtor and adding it to his bill.

But, then again, what else is new in Europe. This is what ‘debt restructuring’ always looks like. The truth is that Italy should use this $400+ billion deficit as leverage because it is.

My latest piece over at Strategic Culture talks in depth about the political backdrop of these problems and how no matter what the EU does, the more they struggle to win over its subject states, the more hollow those victories become.

The response will be more autocracy from Brussels. Expect more market ‘panics’ as Italian debt goes bidless when the ECB stops buying for a few days, like last week. These are scare tactics along with threats of lawsuits and the like.

But, that simply makes his job and that of Conte that much easier to sell an independent, sovereign Italy to voters. And, moreover, never forget who is the primary loser if Italian debt fails?

Not Italy. They can be free of it for lira on the euro.

The big loser is the ECB and the EU as they will have to deal with the losses of having bought all of this garbage thinking they could use it as future leverage to shame Italians with.

From the other side President Trump is squeezing Merkel, Juncker et.al. on tariffs. And while that may yield the positive result of pushing the EU towards Russia and China while weakening NATO, it also strengthens the hand the Visegrad countries have, since they aren’t in the Euro-zone.

Poland, Hungary and the rest will all benefit from Trump’s steel and aluminum tariffs as investment will pour in there and further weaken Merkel’s legal challenges over things like Hungary’s border wall and anti-NGO laws and Poland’s changes to its judiciary.

Juncker talks a good game about ‘country first’ but only when it furthers EU ambitions.

Even if Juncker et.al. are able to break the Italians again and keep them tethered to the euro, it will be a Pyrrhic victory. Because there is no way Germany can continue to support the entire EU without a significant revaluation and restructuring of the entire project.

And by the time they are done abusing everyone to win the day, no one will want to be governed by them anymore. They’ll save the EU by forcing everyone to drown in it. On the other hand, Salvini and the Italians will make Brussels an offer it shouldn’t refuse:

Let us go, accept responsibility for all of Europe equally or we blow it all up.

Something will give here and it won’t be another non-bail out which doubles the bill but pushes out repaying it to 2200 or some such nonsense.

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